Friday, November 21, 2008

Nothing much to add except just a link to an article published Oct 25 (!) by the WSJ:

In all this lies a tale of hubris, missed opportunities, disastrous decisions and flawed leadership of almost biblical proportions. In fact, for the last 30 years Detroit has gone astray, repented, gone astray and repented again in a cycle not unlike the Israelites in the Book of Exodus.

It wasn't that American auto executives were always malicious and stupid while the Japanese were always enlightened and smart. Japanese car companies have made plenty of mistakes, most recently Toyota's ill-timed move into full-sized pickup trucks and SUVs. But just as America didn't understand the depth of ethnic and religious divisions in Iraq, Detroit failed to grasp -- or at least to address -- the fundamental nature of its Japanese competition. Japan's car companies, and more recently the Germans and Koreans, gained a competitive advantage largely by forging an alliance with American workers.

There's some good history there, but some of the digs the article makes at the UAW are a bit annoying.

I thought about this in the shower . . I once worked for a union shop attached to state government. I was not part of the union (we were just muscle and not tradesmen), but I sure as hell never remember these guys standing around deliberating job details in extremis when something broke - they fixed it. The electrician bitched later about having to run the sewer snake, but it was bitching, not legitimate grievance.

Dare I say it? The UAW, in this article, looks as though they also need to surrender something to become a more nimble workforce. I'm not talking about wages, pensions, or anything monetary or their pride in work, but they need to surrender some of the control they have over their jobs for the necessity for flexibility and development of the worker.

Unions are essential to the workplace, and I have absolutely no doubt, based on the talking points from the companies and The Mighty Wurlitzer, that the 3 automakers would love to kill the UAW.

It was clear that he was writing from the perspective of pro-free market.

Especially when he said "This situation doesn't stem from the recent meltdown in banking and the markets."

Much of the current problems do stem from the meltdown. GM cannot get credit and consumers cannot get credit. Sales are down by a massive percentage.

I do not think that labor needs to make more concessions and I do not think that the "poor relationship between labor and management" is really what this guy said it was.

I remember listening to the president of the US Chamber of Commerce on CSPAN last week and he said "We really do not need unions anymore and the reason that the membership of unions has gone down so drastically is because labor and management are such good friends now." I shit you not.

Then there was this from one of the articles that I linked to yesterday:

"1). Following World War II, GM's Chair Charlie Wilson had a major battle with the president of the UAW, Walter Reuther. Reuther wanted the government to set up a federal insurance program to provide health care for all . He also wanted to expand Social Security with a federally administered pension system that was not wholly dependent on the economic health of particular employers.

Wilson -- and other titans of American industry -- fought Reuther tooth and nail. They believed that these programs would undermine the "private market." To head him off, they offered a program of employer-based health and pension benefits. Sixty years later those privately funded health and pension benefits have become an economic albatross. That is not because we are over-generous with health care and pensions in the U.S. In fact, our costs for health care, pensions and unemployment are average for the industrial world. The difference is how we fund them.

In Canada, Europe and Japan, the risks of providing these benefits is spread to everyone through the government. In the U.S. they are associated with specific employers. As the auto industry automated and needed fewer workers to produce a car, it meant that for every car sold, the cost of the benefits -- the "legacy costs" for retirees in particular -- skyrocketed relative to the foreign competition. Health care costs alone now add $1,000 to the cost of every American made car.

In countries where these costs are spread to all through government action, companies are free to succeed or fail based on the qualities of the products and their efficiency -- not the number of their retirees.

Wilson's private sector solution for health care and pensions was a disaster for the long-term health of the auto industry. Reuther's public sector solution must finally be adopted to insure a viable auto industry in the future."

I think that labor's interest is also in innovation and technology and making the best product. Labor wants jobs - jobs mean that people are buying your crap.

I think that there is a tremendous amount of ground there for them to agree. I think that labor has offered up quite a bit - huge concessions in a good faith effort to save the industry.

This one is on management and on big oil.

Fucking T Boone was on the TeeVee the other day talking about letting Detroit fail and file bankruptcy because they were the ones who failed to innovate and give the public products that they want...when T Boone was actively lobbying the Congress against raising fuel efficiency standards. Friggin hypocrite.

It is also a failure of Congress in that they did not mandate higher fuel efficiency when they knew (see: airbags) that The Big 3 would not innovate unless forced.